Responsible Supply Chain

Implementing CSR Procurement

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Cooperating with External Organizations

UN Global Compact

• News release on Konica Minolta Participates in UN Global Compact
• The United Nations Global Compact Website

Responsible Business Alliance (RBA)

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Konica Minolta’s CSR Procurement Initiatives

Commitment to Improving Labor Conditions (human rights), Safety & Health, Environment, and Ethics in the Supply Chain

Companies have to take social responsibility not only for their own products but also for improving labor conditions (human rights), health and safety, the environment, and ethics in the supply chain^*1 used to deliver products to customers. In line with this recognition, Konica Minolta promotes CSR procurement that pursues these kinds of improvements together with its business partners who supply and produce materials such as raw materials, parts and components, as well as Group production sites, with the aim of establishing a sustainable society in which human rights are respected.
In recent years, several laws related to human rights protection, such as the Uyghur Forced Labor Prevention Act (USA) and the Act on Corporate Due Diligence Obligations in Supply Chains (Germany), have been enacted. These laws demand that companies strengthen their human rights efforts. In response to these social demands, the RBA^*2 has updated its code of conduct and various systems. As an RBA member, Konica Minolta will utilize the RBA’s framework to address these social issues.

*1

Supply chain: The series of activities involved in delivering a product or service to a customer, ranging from procurement and production to distribution and sales.

*2

Responsible Business Alliance (RBA): Organization that promotes CSR in the supply chain.

Konica Minolta’s CSR Procurement Promotion Program

Konica Minolta is engaged in a program to promote CSR procurement by calling for CSR activities, CSR assessments, and audits, as well as improvement support.

Konica Minolta is rolling out a four-step CSR procurement promotion program to solve labor (human rights), safety and health, environment, and ethics related issues in the supply chain.
First, we request that suppliers comply with our procurement policy and Supply Chain Code of Conduct. In the case of upstream suppliers, we ask that their direct suppliers make this request.
Next, major suppliers that are important to Konica Minolta’s business, which are identified by their transaction volume (top 80% of Group procurement value), handling of critical parts, and substitutability, and other aspects of Group continuity, and in terms of ESG, such as geopolitical risk, human rights risk, and environmental risk, are asked to complete the RBA Self-Assessment Questionnaire (SAQ) to conduct a CSR assessment to confirm the extent of their implementation of the Konica Minolta Supply Chain Code of Conduct. If the assessment results are off target, we ask them to make improvements.
In addition, we conduct CSR audits on suppliers that are critically important to our business, or on suppliers that failed to achieve their targets even after making improvements. Konica Minolta then supports making improvements to issues identified through CSR assessments and audits. Konica Minolta is committed to this program to promote CSR procurement so as to ultimately empower its suppliers to implement CSR activities voluntarily. Please note that Konica Minolta sometimes ends business with suppliers who show no prospects for improvement despite the support provided.

• Konica Minolta Supply Chain Code of Conduct

Konica Minolta has adopted the RBA Code of Conduct as its Supply Chain Code of Conduct and provides it in Japanese, English, and Chinese. For other languages, please refer to the RBA Code of Conduct.

• RBA Code of Conduct (RBA website [English])

Konica Minolta’s CSR Procurement Promotion Program

Ranking of CSR Assessment Results

Assessment rank	Assessment result	Explanation
Rank A Low risk	100% - 85%	Almost completely satisfies social demands
Rank B Medium risk	85% - 65%	Some issues need to be improved, but can be improved voluntarily
Rank C High risk	Less than 65%	Issues need to be improved, and immediate improvement is required along with an improvement plan. If improvement is not expected even after providing support, a CSR audit is requested.

Targets and Results

KPI	Results				Targets
	FY 2020	FY 2021	FY 2022	FY 2023	FY 2023	FY 2024	FY 2025
Percentage of suppliers requested to take CSR measures	-	100%	-	-	100% of suppliers asked to take CSR measures during the medium-term plan’s period (FY2023-2025) (100% implementation planned for FY2024)
Number of CSR assessments	4 Group manufacturing sites, 40 suppliers	13 Group manufacturing sites, 30 suppliers	4 Group manufacturing sites, 28 suppliers	9 Group manufacturing sites, 30 major suppliers	CSR assessments implemented at Group manufacturing sites and major suppliers during the medium-term plan’s period (FY2023–2025)
CSR assessment implementation rate (cumulative)*2	-	-	-	31%	30%	60%	100%
Number of major suppliers*3	-	-	-	103	-	-	-
Number of CSR third-party audits (RBA-VAP)	One supplier	Two Group manufacturing sites, one supplier	3 Group manufacturing sites, 4 suppliers	3 Group manufacturing sites, two suppliers	3 Group manufacturing sites, two suppliers	3 Group manufacturing sites, 4 suppliers	3 Group manufacturing sites, 3 suppliers
Rate of CSR third-party audit implementation	-	-	-	100%	100%	100%	100%
Final product manufacturing sites with RBA certification (SILVER or higher)*4	0	0	7	8	8	8	8

*1

Requests to suppliers were made for each of the two medium-term plan’s periods: FY2020-FY2022 and FY2023-FY2025.

*2

Figures are cumulative for the medium-term plan (FY2023 - FY2025) and are calculated as the number of CSR third-party audits implemented divided by the number of sites planned for implementation (Group production sites + major suppliers)

*3

The number of major suppliers is reviewed annually.

*4

The figures represent the total number of product manufacturing sites that have undergone third-party audits to obtain new RBA certification or to continue certification, achieving RBA certification at the SILVER level or higher.

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STEP 1 - CSR Activity Request

The Company has drawn up the Konica Minolta procurement policy, the Konica Minolta Supply Chain Code of Conduct, and the Konica Minolta Responsible Minerals Policy Statement to ensure that its suppliers understand and promote the CSR procurement policies and standards that Konica Minolta requires, and all suppliers are requested to comply with them and confirm so in writing. The Company also requests that its upstream suppliers submit requests through their direct suppliers.
The frequency of requests starts at the commencement of business for new suppliers and once every three years for existing suppliers, and the response rate for the most recent request made in fiscal 2021 was 100%. The next request is scheduled for fiscal 2024.
In fiscal 2024, we plan to expand the scope to include indirect material suppliers, identify industries with high human rights risks, and request compliance.

STEP 2 - CSR Assessments Using a Self-Assessment Questionnaire

Since fiscal 2009, Konica Minolta has been conducting CSR assessments using the RBA self-assessment questionnaire since at all Group production sites and major suppliers to assess the level of implementation of the Konica Minolta Supply Chain Code of Conduct.
The CSR assessment evaluates site initiatives to address social issues such as labor (human rights) protection, health and safety, ethics, as well as environmental issues such as minimizing environmental impact. Konica Minolta classifies the results of the self-assessment questionnaire from rank A to C. The targets for overall scores are rank A for all Group production sites and rank B or higher for all suppliers. Rank C suppliers are considered to be high-risk, and CSR audits are conducted for those suppliers that have not achieved their targets even after implementing improvements. Suppliers who received the rank of C and did not achieve their target rank even after receiving improvement support are considered to be high-risk suppliers and are subject to the CSR audit in STEP 3.
In fiscal 2023, nine production sites within the Konica Minolta Group, and 30 of the 103 companies (84 primary suppliers and 19 secondary suppliers) identified as major suppliers conducted the CSR assessment, with all production sites achieving rank A and all suppliers achieving rank B or higher on their overall score. There were no high-risk suppliers. These assessment results met the target, but scores tended to be low in the areas of labor, the environment, and ethics. Specifically, the declining score in the areas of labor and ethics was due to the establishment of management systems, and in the area of the environment, the decline was due to items related to resource usage, waste, and GHG reduction programs. We have asked suppliers whose assessments have declined to make voluntary improvements.

Results of CSR Assessment for Suppliers
(percentages for rank on overall and specific components)

Konica Minolta is also working to ensure that indirect material suppliers, critical partners essential to its business operations, understand the RBA's requirements. In fiscal 2023, we identified on-site contractors and temporary staffing agencies at major manufacturing sites as important indirect material suppliers and conducted self-assessment questionnaires. The risk assessment results showed a 100% response rate, and none of the indirect material suppliers were rated “high risk.”

Type of indirect material supplier		No. of companies assessed for risk	Result
On-site contractors	Cafeteria	3	All low risk
	Security	2	All low risk
	Maintenance	1	All low risk
	Cleaning	2	All low risk
	Other (logistics, waste disposal, etc.)	4	All low risk
Temporary staffing/Contracting		8	All low risk
Logistics/Warehouse operators		3	All low risk
Other		5	All low risk

STEP 3 - CSR Audits

Suppliers that are identified as high risk in STEP 2 are subject to CSR audits. CSR audits consist of the Konica Minolta CSR Audit^*1 conducted by Konica Minolta employees and the VAP Audit^*2 conducted by third-party auditing organizations certified by the RBA.

*1

Konica Minolta CSR Audits are performed by Konica Minolta auditors using RBA auditing standards.

*2

RBA third-party audits (VAP audits): A third-party RBA-accredited auditing organization that verifies compliance with the RBA Code of Conduct based on auditing standards, identifies areas in need of improvement, and encourages corrective action. RBA is one of the most trusted third-party CSR audits in the world.

As mentioned above, no suppliers that were identified as “high risk” in fiscal 2023, so no audits were conducted. Therefore, there were no suppliers with whom transactions were terminated.

Step 4 - Support for Improvement (Capacity Building)

To build internal stakeholder and supplier capacity, Konica, Minolta provides training and support for corrective action based on the results of the CSR assessments and audits. The training is designed to enable participants to understand the respect for human rights required by customers and society, societal demand for CSR procurement, legal and regulatory trends, the RBA Code of Conduct, and their relationship to business, so that they can make CSR procurement activities their own and actively take part. In fiscal 2023, we will continue to provide education to internal stakeholders such as the human resources, procurement, and environment departments of our manufacturing companies, as well as to factories contracted to produce MFP units. In its support of corrective action, Konica Minolta explains the objective and assessment content of RBA to suppliers who do not properly understand the questionnaire’s content at the time of the CSR assessment and provide advice on the required documents and initiatives.
Konica Minolta also assisted the Dong Guan Konka Mould Plastic Co., Ltd. in China, which conducts CSR audits, by training its internal auditors to help it build a system that enables it to voluntarily conduct internal audits make continuous improvements. In addition, we share examples of improvements made at Konica Minolta with the plants of MFP contract manufacturers that have undergone VAP audits and we support their corrective actions.

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CSR Audits (Societal/Customer Requests)

While there were no suppliers that were required to undergo CSR audits under the CSR procurement promotion program, we have conducted CSR audits at our own production sites in the Business Technologies Business and at some of our suppliers in response to societal and customer requests.
In fiscal 2023, RBA VAP audits were conducted at three of our own production sites and two of our suppliers.

CSR audit sites in 2023

• Konica Minolta Business Technologies (Wuxi) Co., Ltd.
• Konica Minolta Business Technologies (Dongguan) Co., Ltd.
• Konica Minolta Business Technologies (Malaysia) Sdn. Bhd.
• Two contract manufactures of MFPs/printing equipment.

In particular, Konica Minolta Business Technologies (Dongguan) and Konica Minolta Business Technologies (Malaysia) identified issues including management of working hours and social insurance, but all corrective actions have been completed and the highest Platinum certification was achieved. Other sites have taken corrective action to address the audit findings and have obtained Silver certification or confirmed the absence of priority non-compliances.